Sarah Palin on Energy & Oil
Republican Governor (AK); 2008 nominee for Vice President
He was referring to the cover story I did for the April 2009 election that pointed out that, contrary to what she'd claimed at the 2008 Republican Convention, the Alaska Gasline Inducement Act (AGIA) had not brought about the largest private sector infrastructure project in North American history, and that construction had not begun on a nearly $40 billion natural gas pipeline to help lead America to energy independence.
"That story was a bunch of lies," he says, "and you were wrong. AGIA is working. The pipeline is going to get built." I think reasonable people would still disagree.
She was asked her views on the 2008 presidential election. In early February, she said she'd like to support John McCain, but could not because of his opposition to opening the Arctic National Wildlife Refuge (ANWR) to exploitation by oil companies. After meeting privately with McCain in Washington the late February, Sarah stopped saying that could not support him.
Under Murkowski's administration, gasline negotiations had taken place behind closed doors. The secret gasline deal [former Gov. Murkowski] was negotiating with Exxon-Mobil, BP, and ConocoPhillips violated the state's Constitution. Among other things, his approach relinquished state sovereignty.
While the other candidates suggested tweaks to Murkowski's plan to hand over state sovereignty to Big Oil, I was confident that no amount of "tweaking" could save it. So I put my name & commitment behind a proposal to open bidding to the private sector. I would not be tainted by previous secret negotiations & corrupt legislative votes.
This was a multi-billion-dollar project, the largest private-sector energy project in US history.
We asked companies to compete for the righ to build Alaska's gasline. Our approach would be open and transparent.
Some accused us of taking too hard a line with the oil companies. I knew we were acting appropriately to hold the companies' feet to the fire.
This project would cost the private sector a tremendous amount in government fees and prep work. Therefore, in crafting what would become the Alaska Gasline Inducement Act, or AGIA, we promised to reimburse up to $500 million in matching funds for the exclusive gasline license.
One such cure: Washington's misguided "Cap and Trade plan. But let's call it what it is: a Cap and Tax program. The environmentalists' plan to reduce pollution is to tax businesses according to how much pollution they produce. Businesses that reduce emissions could trade or sell their government credits to other companies.
We'll all feel the effects of this misguided plan to buy and sell pollution. The president has already admitted that the policy he seeks will cause our electricity bills to "skyrocket." Sadly, those hit hardest will be those who are already struggling to make ends meet. So much for the campaign promise not to raise taxes on anyone making less than $250,000 a year. This is a tax on everyone.
As more and more Americans understand that cap and trade is an environmentalist Ponzi scheme in which only the government benefits, they will refuse to tolerate it.
Construction of a gas pipeline to transport this safe, clean energy supply to the Lower 48 was originally authorized in 1979. Cheap natural gas from othe countries had delayed the project for years. Our government's well-meaning policies had driven producers to other parts of the world where there were no restraints on their activities. That was no way to protect the environment or heat the economy.
Our state Constitution stipulates that the citizens actually own our natural resources. Our goal was to commercialize Alaska's treasure of oil & gas by opening up the North Slope to long-term exploration and production. , creating jobs and stable energy.
"You in the industry make your living by providing the goods and services necessary to get Alaska's resources to market," I said. "Lessees must develop the public's resources or give back their leases." I also knew that unless we accessed our known reserves on state lands, it would be more difficult to argue for access to federal lands such as ANWR.
The oil giant's M.O. is to tie up issues through litigation. It threatened to sue. We said, okay, we know the way to the courthouse, too.
ACES--Alaska's Clear and Equitable Share--represented a major philosophical shift in the role of government. As resource owners, Alaskans literally had a "working interest" in energy exploration and development. Our ACES proposal would provide more value to Alaskans when the price of oil was high but would provide substantial relief to the oil companies when prices fell.
THE FACTS: Palin characterized the pipeline deal the same way before an AP investigation found her team crafted terms that favored only a few independent pipeline companies and ultimately benefited a company with ties to her administration, TransCanada Corp. Despite promises and legal guidance not to talk directly with potential bidders during the process, Palin had meetings or phone calls with nearly every major candidate, including TransCanada.
PALIN: Criticizes her predecessor [for a "revolving door" on oil deals]. Palin asserts her administration ended all such arrangements, shoving a wedge in the revolving door between special interests and the state capital.
THE FACTS: Palin ignores her own "revolving door" issue in office; the leader of her own pipeline team was a former lobbyist for a subsidiary of TransCanada.
THE FACTS: She correctly quotes a comment attributed to Obama in January 2008, when he told San Francisco Chronicle editors that under his cap-and-trade climate proposal, "electricity rates would necessarily skyrocket" as utilities are forced to retrofit coal burning power plants to reduce carbon dioxide emissions.
Obama has argued since then that climate legislation can blunt the cost to consumers. Democratic legislation now before Congress calls for a variety of measures aimed at mitigating consumer costs. Several studies predict average household costs probably would be $100 to $145 a year.
Vital projects now underway show how much science and technology have improved in a generation, greatly reducing risk to the environment. Continued work in Cook Inlet and on the North Slope, new drilling at Nikaitchug, new exploration in NPRA--these projects and more will be carried out with the safest methods.
The Facts: Obama has voiced support for the development of clean-coal technology throughout his political career, starting in the Illinois State Senate and later in the US Senate. He reiterated that stance during his Aug. 28 nomination speech and at the Oct 7 debate that Palin references. Obama had spoken out against lifting the federal moratorium on offshore drilling since June, when McCain proposed lifting it. Obama said on Aug. 1 that he would be willing to compromise on his position if it were a part of a more overarching strategy to lower energy costs.
The Verdict: False. Obama long has supported clean coal technology and more recently changed his stance on offshore oil drilling--two months before the Oct. 7 debate referenced by Palin.
PALIN: Sen. Biden, you would remember that, in that energy plan that Obama voted for, that’s what gave those oil companies those big tax breaks. Your running mate voted for that. You know what I had to do in the state of Alaska? I had to take on those oil companies and tell them, “No,” you know, any of the greed there that has been kind of instrumental, I guess, in their mode of operation, that wasn’t going to happen in my state. And that’s why Exxon and ConocoPhillips, they’re not my biggest fans, because what I had to do up there in Alaska was to break up a monopoly up there and say, you know, the people are going to come first and we’re going to make sure that we have value given to the people of Alaska with those resources.
PALIN: When we talk about energy, we have to consider the need to do all that we can to allow this nation to become energy independent. It’s a nonsensical position that we are in when we have domestic supplies of energy all over this great land. And East Coast politicians who don’t allow energy-producing states like Alaska to produce these, to tap into them, & instead we’re relying on foreign countries to produce for us. We’re circulating about $700 billion a year into foreign countries, some who do not like America--they certainly don’t have our best interests at heart--instead of those dollars circulating here, creating thousands of jobs and allowing domestic supplies of energy to be tapped into and start flowing into these very, very hungry markets. Energy independence is the key to this nation’s future, to our economic future, and to our national security.
A: I will focus on energy independence. First and foremost, an energy independent nation. We must get there. It is a matter of national security and of our future prosperity, being able to quit relying on foreign sources of energy to feed our hungry markets when we have the American supplies and we have the American ingenuity and we have the American workers to produce these supplies of energy.
Q: Americans have heard a lot of information on ANWR. I’ve heard you talk passionately about your love for your state of Alaska.
Q: Why then would you support drilling in Alaska?
A: I support drilling in Alaska because it’s going to be good for our nation.
Q: Including ANWR?
A: Absolutely. ANWR is a 2,000 acre plot of land. It’s about the size of LAX, that platform of land that we would need to explore. But, no secret, John McCain and I agree to disagree on that one. And I’m going to keep working on him with ANWR.
Q: And what is the impact for Americans down the road if we don’t do something to solve our energy dependence?
A: That imbalance of trade is something that we need to tackle also. Yes, those dollars should be circulating within our own economy. It’s a matter of national security. It is a matter of our future prosperity. Energy is inherently linked to security and prosperity. More and more Americans are recognizing this also. You can see the constituents putting pressure on Congress to come on, Congress, get rid of that gridlock that you are so engaged in now. We sort of have a “do nothing Senate” right now where nobody’s wanting to really pick up the ball and run with it and take the steps that we have to take to become more energy independent. And it’s going to take a whole a change in leadership in order to really crush that gridlock and get going on this.
With Russia wanting to control a vital pipeline in the Caucasus, and to divide and intimidate our European allies by using energy as a weapon, we cannot leave ourselves at the mercy of foreign suppliers.
To confront the threat that Iran might seek to cut off nearly a fifth of world energy supplies ... or that terrorists might strike again at the Abqaiq facility in Saudi Arabia ... or that Venezuela might shut off its oil deliveries ... we Americans need to produce more of our own oil and gas.
And take it from a gal who knows the North Slope of Alaska: We’ve got lots of both.
Starting in January, in a McCain-Palin administration, we’re going to lay more pipelines ... build more nuclear plants ... create jobs with clean coal ... and move forward on solar, wind, geothermal and other alternative sources.
Our lawmakers also included an additional $60 million for the Home Energy Rebate Program operated by the Alaska Housing Finance Corporation and $50 million in grant funds to the Renewable Energy Fund, bringing the total available for renewable energy projects in FY 2009 to $100 million.
A: What the GOP has got to do, on a real practical level, between now and the election, is to convince Americans that it is our energy policy that is best for our nation and the nation’s future, that if we are to become energy independent and if we are to become a more secure nation then we had better start supplying our very, very hungry markets across the nation with American supplies of energy. The GOP agenda to ramp up domestic supplies of energy is the only way that we are going to become energy independent, the only way that we are going to become a more secure nation.
And the GOP agenda is the right agenda in that respect, but the GOP is going to have to prove to Americans in following weeks that we can safely, responsibly and ethically develop these resources. That, of course, has been a problem for the GOP.
“Windfall profits taxes alone prevent additional investment in domestic production. Without new supplies from American reserves, our dependency and addiction to foreign sources of oil will continue,” Palin said.
A: Well, it’s pretty pathetic, that action that they’ve taken. Appreciate the president’s call to lift the moratorium. Appreciate the president’s call to drill in ANWR, to do all those things for American production opportunities.
The Governor is hopeful plaintiffs will receive payments this fall. So far, though, Exxon has not indicated whether it will cut checks to plaintiffs right away, or seek further reductions in the award as the case goes back to the lower courts.
In addition, there will be conservation incentives for the utilities. For every 1% reduction in 2008 kilowatt hour sales from 2007 sales, the state will make a year-end contribution for capital energy projects to the utility.
The Energy Debit Card will go out to every qualifying [Alaska resident]. The benefit will be $100 per month per recipient. The temporary Energy Debit Card can be used for purchases from Alaska energy vendors, such as heating oil distributors, natural gas utilities, electric utilities, gas stations & other retail fueling stations.
The value of this plan is approximately $1.2 billion. The grant to electric utilities is expected to be $475 million, while the Energy Debit Card totals are forecast to be $729 million. The Governor has proposed this energy relief plan for one year.
“I’m disappointed that House Finance subcommittee members removed $523,000 in funding for PSIO from my budget. Facing the prospect of the largest construction project in North America, a natural gas pipeline, we must demonstrate to Alaskans and the nation that we provide sound oversight of the systems that are needed to develop our resources. I am hopeful the full Finance Committee will restore funding for critical PSIO positions needed to accomplish this mission.“ The money would fund personnel for investigation of system integrity breaches and implementation of a statewide quality assurance program.
The legislation, sponsored by Sen. Joe Leiberman (I-CT), aims to designate ANWR as wilderness. Palin criticized the bill as it would effectively ban oil and gas exploration in the most promising unexplored regions in North America--the coastal plain of ANWR. In the letter, Gov. Palin states that national energ policy must include a variety of resources:
“I don’t see national energy policy as an either/or proposition,” said Gov. Palin. “Rather, we need to develop secure domestic sources of conventional energy, such as oil & natural gas, while also researching and developing alternative and renewable energy.”
Gov. Palin reminded senators that opening ANWR to oil and gas exploration would reduce US dependence on foreign sources of oil, increase federal revenues and create hundreds of thousands of jobs.
Local production of renewable biomass energy benefits the national economy, promotes national and regional energy security and stimulates the rural economy through the creation of high quality jobs. Encouraging such production will require increased federal investment in programs that support cellulosic biofuels research, increased biodiesel production and use, increases in wind and solar energy and energy from animal wastes, improvements in energy efficiency, bio-based product development, effective carbon storage, and other renewable technologies.
This includes meeting my goal of generating 50% of our electric power with renewable sources. That's an unprecedented policy across the US but we're the state that can do it with our abundant renewables, and with Alaskan ingenuity.
In our energy plan, for the first time, Alaskans will see cooperation among our utilities. We'll introduce legislation creating the joint utility corporation to finally accomplish this. We will have coordinated power generation that will finally make sense for consumers.
PALIN: The chant is “drill, baby, drill.” That’s what we hear across this country in our rallies because people are hungry for those domestic sources of energy to be tapped into. They know that even in my own energy-producing state we have billions of barrels of oil and hundreds of trillions of cubic feet of clean, green natural gas. Barack Obama and Sen. Biden, you’ve said no to everything in trying to find a domestic solution to the energy crisis. You even called drilling -- safe, environmentally-friendly drilling offshore as raping the outer continental shelf.
A: The Alaska Gas Inducement Act (AGIA) is Palin’s crowning achievement as governor. Previous governors have asked oil companies to ship natural gas and never got anything done. Palin changed the nature of the conversation. Instead of pleading, she told the oil companies what we want and invited them to bid for the job with an incentive of $500 million in start-up money. However, the down side is that she did not include enough protections for Alaskans and American companies. The job is being out-sourced to a Canadian company. A second positive accomplishment is her whistle-blowing to expose the GOP chairman who was conducting official GOP business on the job for the state.
A: We have.
Q: Is he softening?
A: Well, I’m very, very encouraged, as we all understand that John McCain knows, more so than any other leader in our nation today, that for national security reasons we must be an energy independent nation. We must start taking the steps to get there. That’s why he has embraced offshore drilling. That’s why he has embraced the ideal of the alternative fuels also. And I’ll keep working on him with ANWR.
Q: There will be some spirited discussion, I assume, in the administration.
A: Sure. The nice thing about him, too, is he is not asking me or anybody else to check our opinions at the door. He wants that healthy deliberation and debate within.
Q: And you’ve talked about that too?
A: Yes, we sure have. Yes. It’s been refreshing.
Rebuffing criticism of the pipeline subsidy, Ms. Palin has cast the pipeline as a way for Alaska to “end our dependence on foreign oil.” She has said she hopes the pipeline effort will show that Alaska can contribute to a new energy economy, rather than be known as the state that receives more per capita federal spending than any other. Critics in the state complained that Palin undercut her clean-government image by appointing as her chief adviser on the pipeline a former lobbyist for TransCanada. The adviser, Marty Rutherford, her deputy commissioner of natural resources, earned about $40,000 lobbying the state government for a TransCanada subsidiary in 2003.
“This solidifies our commitment to facilitating an LNG project that is a product of market interest,” Governor Palin said. “By committing both project capital and natural gas resources to a pipeline that would transport North Slope natural gas to tidewater, an LNG project can remain an integral element of the state’s effort to deliver Alaska’s gas to market.“
Specifically, the Administrative Order instructs the two departments to provide specific kinds of support to those pursuing development of an economically and technically viable liquefied natural gas project. That support includes permitting coordination, fiscal and economic analysis, and facilitation of meetings with federal agencies.
In a speech given in Lansing, Michigan, Senator Obama called for the completion of the Alaska natural gas pipeline, stating, “Over the next five years, we should also lease more of the National Petroleum Reserve in Alaska for oil and gas production. And we should also tap more of our substantial natural gas reserves and work with the Canadian government to finally build the Alaska natural gas pipeline, delivering clean natural gas and creating good jobs in the process.“
Gov. Palin said, ”This is a tool that must be on the table to buy us time until our long-term energy plans can be put into place, and it is gratifying to see Senator Obama get on board.“
A: I have not talked him in to ANWR yet. But yeah, he has evolved into being open enough to say yes to that offshore. Obama certainly hasn’t gone there. We certainly need this. We need it for American security, & for energy independence.
A: I’ll correct you there with all due respect--the people of Alaska understand that Alaska has so much to contribute in terms of energy sources to the rest of the US. Folks up here want ANWR to be unlocked by the federal government so that we can drill. We’ve got a tremendous amount of resource up here, and we’re ready, willing and able to contribute. I think Washington doesn’t understand that we’re at a real critical crossroads: We are either going to become more and more dependent on foreign sources of energy, or we’re going to be able to secure our nation and drill domestically for safe, stable, clean supplies of energy that we have here. We have them in Alaska.
KNOWLES: I would look to all of the proposals to see what is the best deal for Alaska. The next governor is going to have to sit down with Alaska business leaders, members of the oil and gas industry and others to negotiate an Alaska gas line on Alaska’s terms. Sarah has refused to meet with the executives and employees of ConocoPhillips, BP, Alyeska, with the regional CEOs of the Native corporations. I believe that we cannot afford to have a governor who is AWOL. You cannot delegate leadership.
PALIN: That is an untruthful statement. I’ve met with Exxon; with ConocoPhillips; with the BP employee group. So, that’s not true.
PALIN: That is an untruthful statement. I’ve met with Exxon. I’ve met with ConocoPhillips. I’ve met with the BP employee group and the ConocoPhillips folks. Heck, I have the endorsement of the North Slope union hands up there.
A: Yes. If the state is going to offer incentives--and award them to a specific proposal--it is reasonable to expect a firm start date. Otherwise, other proposals need to be given the opportunity to begin construction.
A: I am opposed. This initiative is akin to taxing income before it is even earned. The way to get an agreement on building a pipeline is to negotiate . not litigate.
Q: Do you support the Petroleum Profits Tax passed by the Legislature and signed into law by Gov. Murkowski? If no, why not?
A: My preference was a tax on the gross price with a price-progressive index. We need to see how companies apply the tax credits within the law. If the credits are abused and Alaska is shortchanged, changes will be proposed. The intent of the credits is to encourage new exploration and infrastructure development.
PALIN: I do. I do.
BIDEN: Absolutely. Absolutely we do. We call for setting hard targets.
Q: On clean coal?
BIDEN: My record for 25 years has supported clean coal technology. A comment made in a rope line was taken out of context.
PALIN: As governor of the nation’s only Arctic state, Alaska feels & sees impacts of climate change more so than any other state. And we know that it’s real. I’m not one to attribute every activity of man to the changes in the climate. There is something to be said also for man’s activities, but also for the cyclical temperature changes on our planet. But there are real changes going on in our climate. And I don’t want to argue about the causes. What I want to argue about is, how are we going to get there to positively affect the impacts? We have got to clean up this planet. We have got to encourage other nations also to come along with us with the impacts of climate change, what we can do about that.
BIDEN: Well, I think it’s clearly manmade. If you don’t understand what the cause is, it’s virtually impossible to come up with a solution. We know what the cause is. The cause is manmade.
BIDEN: We have 3% of the world’s oil reserves. We consume 25% of the oil. John has voted 20 times in the last decade-and-a-half against funding alternative energy sources, clean energy sources, wind, solar, biofuels. Obama believes by investing in clean coal and safe nuclear, we can not only create jobs in wind and solar here, we can export it.
A: A changing environment will affect Alaska more than any other state, because of our location. I’m not one though who would attribute it to being man-made.
A: We need to analyze the potential economic costs, needs and opportunities associated with climate change. Let’s be cautious in how we react--to make sure we don’t overreact. The Alaska Climate Impact Assessment Commission is supposed to assess the situation and issue a report on March 1, 2007. This is a good start.
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